Subaru Motors Finance to target first-time buyers, expand credit access

Subaru Motors Finance plans to expand its underwriting to attract more first-time buyers, Managing Director Michael Cottone tells Auto Finance News in the latest episode of “The Auto Finance Roadmap Podcast.”

“We are extremely low when it comes to delinquencies; the FICO scores are very high, the income levels are high,” he says. “We’re looking to try and find more buyers for the Subaru brand. We’re trying to look at where we can expand credit policies … especially looking at the younger demographic.”

Cottone pointed to Subaru’s college graduate financing program, which, according to Subaru, approves new-vehicle loans for recent graduates with thin or invisible credit files as long as:

• The graduate’s payment-to-income ratio does not exceed 15% of gross monthly income;
• They have not faced bankruptcy, foreclosure or repossession; and
• They have proof of employment and income.

The program also offers up to $500 in cash rebates, according to the retailer.

As a private-label captive for Subaru of America powered by Chase Auto, Subaru Motors Finance uses Chase’s digital platforms and in-person events to market Subaru financing offers, Cottone says.

“We’re trying to find all the different avenues from JPMorgan Chase to get those first-time buyers into a Subaru. … It’s really a matter of generating more traffic, more conquesting and more customers to come into the doors so the retailers can sell to them,” he says.

The captive is also leaning on Subaru of America’s lease incentives to offer borrowers lower monthly payments rather than financing longer terms, Cottone says.

Cottone says Subaru Motors Finance’s originations rose year over year as of July 7, without providing specifics. Subaru of America’s auto sales jumped 18.1% YoY in June to 54,909 units.

In this episode of “The Roadmap,” Auto Finance News senior associate editor Aidan Bush and Cottone discuss consumer affordability challenges, leasing, longer loan terms, EV financing and technology adoption.